Sahil Muliyil, senior supervisor, state and native actual property tax at RSM US LLP, sat down for a video interview at Nareit’s REITwise: 2026 Instructional Convention in Hollywood, Florida, March 24-26.
State and native taxes (SALT) might not at all times seize headlines, however Muliyil emphasised that they will materially form REIT funding outcomes, usually in methods which are missed till it’s too late.
“Structuring performs an enormous half in mapping out (greater than) the tax leakage…in growth, working, and disposition phases,” he mentioned, underscoring the necessity for a full lifecycle view of tax publicity.
A key problem is that many buyers assume REITs are largely shielded from taxes because of their federal construction. Nevertheless, Muliyil famous that state and native jurisdictions continuously impose different taxes—equivalent to gross receipts, franchise, or internet value taxes—that may considerably affect returns. “There are lots of different issues to consider,” he mentioned, notably in jurisdictions like Texas, Tennessee, and Oregon which have distinctive tax regimes.
Muliyil additionally warned that tax concerns are too usually addressed throughout due diligence or disposition, quite than upfront. This reactive method can result in surprising liabilities, together with switch taxes or gross sales and use taxes, that might have been mitigated with earlier planning.
Finally, he careworn that incorporating SALT evaluation into preliminary funding choices is crucial.
“Going into that with the entire data that you simply want goes to be very important,” Muliyil mentioned, as a result of tax construction can in the end affect not simply returns, however the place capital is deployed.
